Property, Plant and Equipment

Property, plant and equipment consists of the following (in thousands):



	June 30, 2015			December 31, 2014
Oil and natural gas properties
Proved(1)	$	12,199,049		$	11,707,147
Unproved	261,657			290,596
Total oil and natural gas properties	12,460,706			11,997,743
Less accumulated depreciation, depletion and impairment	(9,131,153		)	(6,359,149		)
Net oil and natural gas properties capitalized costs	3,329,553			5,638,594
Land	14,648			16,300
Non-oil and natural gas equipment(2)	482,923			602,392
Buildings and structures(3)	271,367			263,191
Total	768,938			881,883
Less accumulated depreciation and amortization	(212,090		)	(305,420		)
Other property, plant and equipment, net	556,848			576,463
Total property, plant and equipment, net	$	3,886,401		$	6,215,057

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(1)	Includes cumulative capitalized interest of approximately $45.6 million and $38.1 million at June 30, 2015 and December 31, 2014, respectively.


(2)	Includes cumulative capitalized interest of approximately $4.3 million at both June 30, 2015 and December 31, 2014.


(3)	Includes cumulative capitalized interest of approximately $19.2 million and $17.1 million at June 30, 2015 and December 31, 2014, respectively.

Accumulated depreciation, depletion and impairment on oil and natural gas properties includes cumulative full cost ceiling limitation impairment of $6.3 billion and $3.7 billion at June 30, 2015 and December 31, 2014, respectively. The Company reduced the net carrying value of its oil and natural gas properties by $1.5 billion and $2.6 billion during the three and six-month periods ended June 30, 2015, respectively, and by $164.8 million during the six-month period ended June 30, 2014, as a result of its quarterly full cost ceiling analyses.

Drilling Assets. During the six-month period ended June 30, 2015, the Company decided to discontinue all remaining drilling and oilfield services operations in the Permian region and during the second quarter of 2015 classified the related assets, having a net book value of approximately $20.0 million, as held for sale, which is included in other current assets in the accompanying unaudited condensed consolidated balance sheet at June 30, 2015. The Company intends to dispose of the assets during the third quarter of 2015.

Drilling Carry Commitments

During the six-month period ended June 30, 2014, the Company was party to an agreement with a co-working interest party, Repsol E&P USA, Inc.’s (“Repsol”), which contained a carry commitment to fund a portion of the Company’s future drilling, completing and equipping costs within areas of mutual interest. The Company recorded approximately $175.4 million for Repsol’s carry during the six-month period ended June 30, 2014, which reduced the Company’s capital expenditures for the period. Repsol fully funded its carry commitment in the third quarter of 2014.

Under the original agreement, the carry commitment could have been reduced if a certain number of wells were not drilled within the area of mutual interest during a twelve-month period and the Company failed to drill such wells following a proposal by Repsol to drill the wells. During 2013, the Company temporarily reduced its rate of drilling activity. As a result, the Company drilled less than the targeted number of wells for such twelve-month period, which resulted in Repsol having a right to propose additional wells. In the second quarter of 2014, the Company and Repsol amended the agreement to eliminate Repsol’s right to propose such additional wells in exchange for a commitment by the Company to drill 484 net wells in the area of mutual interest between January 1, 2014 and May 31, 2015, subject to delays due to factors beyond the Company’s control. Under the terms of the amended agreement, the Company agreed to carry Repsol’s future drilling and completion costs in the amount of approximately $1.0 million for each well of the 484 commitment that it did not drill, up to a maximum of $75.0 million in carry costs. As of May 31, 2015, the Company had drilled 453 net wells under this arrangement. As a result, the Company anticipates that it will carry a portion of Repsol’s drilling and completion costs totaling up to approximately $31.0 million for wells drilled in the future in the area of mutual interest. Other than the above, the Company has no carry or drilling obligations to Repsol.